Question 1 (3 Marks)
Hilary is a well-known mountain climber. The Daily Terror newspaper offers her
$10,000 for her life story, if she will write it. Without the assistance of a ghost
writer, she writes a story and assigns all her right, title and interest in the
copyright for $10,000 to the Daily Terror. The story is published and she is paid.
She has never written a story before. She also sells the manuscript to the
Mitchell Library for $5,000 and several photographs that she took while
mountain climbing for which she receives $2,000.
Discuss whether or not the three payments are income from personal
exertion. Would your answer differ if she wrote the story for her own
satisfaction and only decided to sell it later?
Question 2 (2 marks)
Eric provides his employee with the use of a car for 183 days during the FBT
year. During this period the car travelled 16,000 km. Eric purchased the car last
year for $50,000. The employee contributed $1,000 towards the cost of running
the car and has provided Eric with relevant documentation.
Calculate the taxable value of the car fringe benefit using the statutory
Question 3 (5 marks)
Your client is a parent who lent $40,000 to her son to provide a short-term
housing loan. The agreement is that the son will repay $50,000 at the end of
The loan was made to the son without any formal agreement and without any
security provided for the sum lent. In addition, the client (the mother) has
informed you that she told her son that he need not pay interest. However, the
son repaid the full amount after two years and included in his payment an
additional amount which was equal to 5% pa on the amount borrowed. Only one
cheque was presented for the total amount.
Discuss the effect on the assessable income of the parent.
Question 4 (10 Marks)
Scott is an accountant who purchased a vacant block of land in Brisbane on 1
October 1980. On 1 September 1986, Scott built a house on the land. At the
time, the land was valued at $90,000 and the cost of construction was $60,000.
The property has been rented out since construction was completed. On 1 March
of the current tax year, Scott sold the property at auction for $800,000.
a) Based on the information above, determine Scott’s net capital gain
or net capital loss for the year ended 30 June of the current tax
b) How would your answer to (a) differ if Scott sold the property to
his daughter for $200,000?
c) How would your answer to (a) differ if the owner of the property
was a company instead of an individual?
Indian Tobacco Company ITC Limited, a Rs. 8000-crore Indian combination, and a market pioneer in the tobacco business has been deliberately differentiating into other related and random organizations since 1970 in the request to diminish its reliance on its tobacco business. It has forayed into the fields of FMCG (quick moving consumable merchandise), data innovation and agri business to get the distinctive income streams and furthermore to improve the brand picture. The company has been fruitful in its lodging business known as the ITC-Welcome and worked together with the global gatherings advertise its friendliness administrations. IT has additionally bundled nourishments, marked attire, welcoming cards and stationary, paperboards, bundling and incense sticks organizations in its portfolio. Through the utilization of viable enhancement of its corporate portfolio, ITC has effectively spread its business and market chances over the entire range of the Indian economy and abroad. ITC Group is known as to be a standout amongst the most effectively expanded organizations, and is additionally known for its undertakings on social upliftment like women`s strengthening, essential instruction, and coordinated watershed advancement program. It has 15,000 representatives in India, 3500 in Europe and 2500 in USA. It was joined on 24th august 1910 under the name Imperial Tobacco Company of India Limited. As an Indian administration group took responsibility for organization from its British partners in 1974, its name was changed to I.T.C constrained. In 1975 ITC entered in Hotels In 1988 entered in agro business. In 2000 entered in Fashion Retail shop In 2000 entered in Software business. In 2001 basic base like welcome cards and stationary market. MARTIN-make stresses into fiery remains. The new brand of ITC cigarette New brands viz., MARTIN is presented. Long haul understandings were gone into with the associations of production lines situated at Calcutta, Saharanpur and Munger. ITC CIGARETTE and tobacco is the center business of ITC and market pioneer in India with a piece of the overall industry of 60% both regard of significant worth and volume. It procures 78% of its aggregate incomes from this business and has a net revenue of 40%. It represents two-third of India`s show yearly cigarette sticks market of 90 a large number of which 18% is sent out in cigarettes in nation. The organization markets famous cigarette brands are accessible in the market however some are Wills, emblem, India rulers, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake and so forth. The company`s center has been to convey the most noteworthy item quality and incentive to purchasers in the cigarette and tobacco business, which has helped the organization keep up its administration in that industry. To support the business development force, it has helped the organization keep up its initiative in that industry. To support the business development force, it has presented celebration packs of brands like `Flake Filter`, `Bristol Filter`, and `Scissors Filter` in select markets of Kerala. ITC Cigarette is accompanying new brand and i.e MARTIN The organization had that quite a bit of ability to construct an administration position in light of its determined spotlight on to make the incentive for the client; to make the client most profitable individual in the organization by appealing item plan, quality, and development in the item, creation innovation, showcasing and circulation in the market. Because of all reason ITC is serving the clients from the drawn out stretch of time. This key spotlight on the customer has paid ITC phenomenal benefits. ITC`s has universal intensity is reflected in the abroad markets as well. In the to a great degree aggressive US showcase, ITC offers excellent, esteem estimated cigarettes and on prepared to serve the clients. In West Asia, ITC has turned into a key player in the GCC showcases through developing volumes of its brands. ITC`s cigarettes are delivered in express those are - Bangalore, Munger, Saharanpur and Kolkata. These manufacturing plants are known for their abnormal amounts of value, by their innovation and workplace. Market Leadership. Intense brands crosswise over entire portion. Shopper adequate costs. Broad dissemination arrange More than 900 discount merchants serving in excess of 1 million retail outlets. World-class cutting edge innovation and item. Venture Rs.10 billion out of six years. Leaf Tobacco: ITC spearheaded the development and advancement of leaf Tobaccos in India. The Leaf Tobacco business association with the rancher is very nearly 100 years of age. ITC is the biggest purchaser, processor and exporter of leaf tobaccos in India-making a worldwide seat check for the single biggest incorporated wellspring of value tobaccos. Sythesis: Channel is made of 95 % cellulose acetic acid derivation. Tipping paper to cover the channel. Moving paper to cover the tobacco. Tobacco mix. BUSINESS MISSION AND VISION Mission is To upgrade the riches creating capacity of the venture in a globalizing situation, conveying unrivaled and reasonable partner esteem. Vision is Sustain ITC`s position as one of India`s most important organizations through world class execution, making developing an incentive for the Indian economy and the Company`s partners. ITC`s CORE VALUES Genuineness towards work. Client Focus. Regard for People. Perfection in quality and administration. Development in thoughts and Product. Advertising OBJECTIVE To make the world class or world known brand by giving the best quality and fulfill the client require with delightful feeling. To hold the situation as a market pioneer in commercial center. What's more, make over 85% incomes of Cigarettes in the year 2010-2011. Best in Internal Vitality, showcase standing, benefit. Circumstance ANALYSIS COMPETITIORS: In India, three noteworthy cigarette players command the market, basically ITC with 75% piece of the overall industry, Godfrey Phillips with 14% and VST with 4% offer of the market. Division, TARGETTING and POSITIONING: As worry about division, they are divided by the requirements and taste of the client. In each business they divided the items with the level of salary. Items are accessible as indicated by their acquiring limit. Items are accessible with the least cost and in addition higher cost. As in the lodging ITC give classifications of the inn rooms. As focusing on is concern ITC focusing on the young basically with the desire for popular style and began offering quality; they are worry about the quality not amount. SUPPLY CHAN MANAGEMENT: The accompanying segments are in store network administration. Creation: It about where business center around the amount to deliver, where to deliver it and what are the providers to utilize. Stock: It about where the business chooses where to store their items, and the amount to store. Circulation: where the work locale inquiries regarding how their ought to be moved and put away. Installments: It worry about where business search for the most ideal approaches to providers and get paid by clients. Assembling Process: Cigarette fabricating process includes preparing of tobacco leaf and stem to various tobacco mixes, which is cut tobacco. Slice tobacco is then changed over to cigarette utilizing other crude materials for making cigarettes and pressing them in different structures according to the exchanging prerequisite. ITD gets different evaluations of Tobacco Leaf and originate from Indian Leaf Tobacco Division (ILTD) based basically in Guntur, Andhra Pradesh. The slice tobacco is then sent to the auxiliary assembling division (SMD) for making and pressing cigarettes. At SMD, there are two procedures: Making and Packing Making is the procedure is the moving of cigarette. Pressing procedure is pressing of these cigarette sticks in the cigarette bundles of different pack styles. Showcasing STATERGY CORPRATION STATERGY: Do the correct things to the opportune place at the ideal time. Maintain various drivers of development coordinating inner capacities with developing business sector openings. Seek after world class aggressiveness in all organizations and over the whole esteem chain.>GET ANSWER